Transcription

2 November 2007 Copyright CBI 2007 The content may not be copied, distributed, reported or dealt with in whole or in part without prior consent of the CBI.

3 Climate Change: Everyone s business 01 A much greater sense of urgency is required if the UK is to meet its targets for reducing greenhouse gas emissions The next two or three years will be critical. A much greater sense of urgency is required if the UK is to meet its targets for reducing greenhouse gas emissions at an affordable cost, and to establish an international leadership role in the low carbon economy of the future. Already it is clear that the government s targets for cutting greenhouse gases by 2020 are unlikely to be met solely through measures taken in the UK. Its longerterm goals for 2050 are also very challenging, and will not be achieved without significant additional effort. Failure to act now will mean that the costs of tackling climate change in the future will be much higher. The UK will also miss out on the commercial opportunities that will emerge on the pathway to a low carbon economy. The CBI s Climate Change Task Force has spent 10 months analysing this challenge. It is made up of business leaders from key sectors of the UK economy and whose companies globally employ nearly 2 million people, generating annual revenues of approximately 1000bn. Informed by a major study commissioned from McKinsey, the Task Force has assessed the economic benefits and costs of different options for reducing greenhouse gas emissions. We have focused on what needs to be done by 2030 to be on track for the government s 2050 target. And its conclusion is that substantial changes will be needed in the way the economy works if the UK is to meet its goals. Many of the technologies and solutions that will be required already exist but are not yet commercially viable. The pace and scale of implementation must now be accelerated. The report shows that by 2030, moving to low carbon sources of electricity and improving energy use in buildings can each deliver about 30 per cent of the additional cuts needed, with the remaining 40 per cent coming from transport and industry. For the longer term to 2050, further change is needed to more than double the level of energy efficiency and halve the carbon content of the energy used in the economy compared with today. But most taxes and regulations were designed for the old economy. The report calls for a shift to a world where carbon becomes a new currency so that consumers and businesses are rewarded for making the right choices. Carbon has to be priced according to supply and demand, under a system which leads to lower emissions, crosses national borders, and rewards good behaviour. According to the McKinsey analysis, additional action needed in the UK to meet the government s targets implies a maximum price of 40 per tonne of CO 2 equivalent (tco 2 e) by 2030 provided that the full range and scale of initiatives are implemented. The maximum price would be higher in 2020 ( per tco 2 e and possibly more) given the higher cost of emerging technologies in the short term. This translates into an investment of around 100 a year per household (under 1 per cent of GDP) by This investment will help pay for a more sustainable way of life and shift resources to those parts of the economy providing low carbon products and services. Some households would pay less than this, depending on things such as their current use of energy and how successfully they take up cost-effective measures to improve energy efficiency.

4 02 Climate Change: Everyone s business Changes on the scale needed and at affordable cost will only happen if government, business and consumers work together. Government cannot do the job by itself, nor can business: but together we can use our position as one of the world s great trading nations to secure global action. If we are to succeed, the climate change agenda must therefore become everybody s business. Our commitment is to help achieve that and work with others to implement the necessary actions at home and abroad. The report sends out five clear messages: The government s targets for 2050 are stretching but achievable and at a manageable cost provided early action is taken. The three interdependent players are consumers, who drive change; government, which sets the framework and works with other countries to build international agreements for reducing emissions; and business, which invests and delivers. In the run up to 2020, the emphasis must be on much higher energy efficiency together with preparations for a major shift to low carbon energy sources in the years to 2030 and beyond. The big opportunity here is that a third of our generating capacity will become obsolete over the next 25 years, and must be replaced. This opens the way to a smaller carbon footprint. Technology has a vital part to play in opening up sustainable solutions. The UK has a unique opportunity to prosper in key markets of the future by taking a lead in the development of low carbon technologies and services in power, buildings, transport and industry. Government must give higher priority to existing research and technology programmes in these areas, and support the launch of new programmes to develop emerging solutions. Empowering consumers to make low carbon choices is equally vital. Business and government must work together not only to encourage take-up of greener products, but also to promote new ways of doing things (such as smarter ways of working) which can help improve our quality of life as well as cutting emissions. Market forces will drive big changes, but they will not by themselves be enough to do the job. The full range of public policies must be deployed to create the right incentives. Priorities include promoting an effective market price for carbon; revenue-neutral tax reform (such as changes to business rates and council tax) to reward greener behaviour; and bigger, more focused research and development (R&D) programmes to finance new technologies and solutions until they become commercial. Implementation is now the key. The pace of change in all areas of carbon reduction must be far higher than it is today. For example, the current rate of insulating the existing housing stock needs to triple over the next 20 years. This will only be achieved through much closer working between government, business and consumers, with the focus on delivery. In some cases, the priority is to improve the existing wide range of public policies, for example, by building on welcome initiatives such as the EU Emissions Trading Scheme (EU ETS) or delivering on plans to improve the planning system. In other cases, business needs to take a lead, for example, in agreeing new standards for measuring corporate and product-related emissions, to help drive continuous improvement. In all cases, key decisions must be taken in the next three years if the UK is to get on track to meet its emissions targets (see figure 1, page 3). Trust between consumers, business and government is another critical ingredient for success. There would be no quicker way of destroying confidence in the climate change agenda than by using green excuses to bolster tax revenues. Consumers also need confidence in the information they are given about the environmental impact of different products and services. Economic competitiveness must underpin climate change policy. This means giving priority to energy efficiency measures, which must deliver a substantial part of the needed cut in emissions. Sectors like steel or chemicals, which face intense competition from countries that are not yet seeking to cut their emissions, will also need special consideration. So what s to be done? Consumers are the essential driver for change. Combining the emissions for which they are directly responsible with those that they influence through their purchasing decisions, they have an impact on some 60 per cent of UK emissions. As voters, they have a powerful influence on public policy. They need the information, the incentives, and the opportunity to make low carbon choices. They will require: Reliable and consistent information about the consequences of their choices. Much wider access to low carbon products and services than is on offer today. Incentives to make low carbon investments. For example, consumers could already be making worthwhile cost savings through improved insulation of their homes but they do not, because for them the payback period is too long. Government and business must look for creative ways to bridge this timing gap.

5 Climate Change: Everyone s business 03 Figure 1: Timelines to implement policies are tough and decisions need to be made in the next three years Efficient buildings and appliances Low carbon power generation 2030 extra abatement 68 mtco 2 e 64 mtco 2 e 2030 outcome Over 15m homes retrofitted with better insulation Electrical products at least 30 per cent more efficient than today Approximately 3000 wind farms Up to 20 GW of CCS plants 12 nuclear plants Decisions needed in next three years Smart meters; business rates and council tax reform; stamp duty extension; EU appliance standards and VAT; zero-carbon home demonstration; low carbon office guidance and demonstration: government procurement EU ETS post-2012; planning for major projects; local planning regulations; R&D esp. CCS demonstration; decisions on nuclear Low carbon transport 53 mtco 2 e 10 per cent of cars are hybrids All new private cars 40 per cent more efficient compared to 2006 Mandatory successor to EU agreement on car CO 2 ; tax treatment of cars; extended modal shift initiatives; freight best practice; government procurement; EU ETS for aviation; Single European Sky; R&D Low carbon industry 37 mtco 2 e Source: McKinsey UK cost curve; team analysis Switch away from conventional fossil fuels More efficient equipment (compressors, fans, pumps) EU ETS post-2012; ECAs; R&D; supply chain pressure via corporate reporting ILLUSTRATIVE The UK government has done more than most others to set a framework for change. We welcome the proposals in the Climate Change Bill as important elements of a framework to promote significant cuts in emissions. But it must now focus on implementation as a matter of urgency. It must go with the grain of the market wherever possible, by removing barriers to change. This means it must: In the coming 12 months, pass the legislation needed to rebuild the UK s power generation capacity in a timely manner, with a diverse, low carbon energy mix. All options will have to be available, including renewable energy and nuclear. Early reform of the planning system is essential. Push for agreement early next year on the post-2012 design of the EU ETS, which will be vital in establishing an effective long-term carbon price. Prioritise investment in relevant research and technology. That means re-allocating existing resources, and adding new funds where necessary. The aim should be at least to match the EU average for investing in energy and climate change technology. Empower consumers through education, communications and incentives. Provide incentives, regulation and tax structures which stimulate a low carbon economy, and ensure consistently supportive policies. Business has already made significant progress in responding to the climate change agenda. It is well placed to make an early and decisive contribution to finding and implementing solutions to the challenge of climate change. Its priorities now must be to: Incorporate climate change policies into its DNA. Consumer demand will stimulate competition to produce greener alternatives to current products and services, and reward those businesses that take a lead. In the low carbon future, companies will have to be green to grow. Redouble efforts to improve energy efficiency, by focusing on areas such as transport and buildings. Work with employees and the supply chain to reduce emissions, and adapt the current workplace to cope with the climatic and other changes that are already likely as a result of past CO 2 emissions. Measure its carbon footprint, and develop reporting systems to benchmark performance. Provide consumers with the reliable communications and product developments they will require. Members of the Task Force are committed to meeting the challenge. With a global carbon footprint from their operations of close to 370 mtco 2 e, or roughly 1 per cent of global emissions, they readily accept their responsibility to take positive action. Take a leadership role in international negotiations for climate change agreements.

6 04 Climate Change: Everyone s business Companies represented on the Task Force have already taken significant action to tackle emissions. Equally, they recognise that more must be done. Their first priority therefore is to ensure they deliver their existing corporate commitments to further emissions reduction. In addition, they are now pledging to: Develop new products and services that will enable all households in the UK to cut their emissions in half by Task Force companies provide a wide range of products and services to millions of customers. We will work with others to draw up an action plan and milestones which will build on existing initiatives to reduce emissions in homes, appliances and personal travel. One initiative, led by Barclays, will develop green finance products: other products will follow. Work with our 2m employees to help them reduce their greenhouse gas emissions at work and at home. Our aim is to begin by identifying and promoting action to save 1 mtco 2 e within three years. We will coordinate this work with our efforts to help all households cut their emissions. Promote effective reporting procedures that set the benchmark for reporting carbon emissions.* We will work with others, including the Carbon Trust, to promote a standard that could be adopted by all companies above a certain size, and we will develop a small and medium enterprise (SME) friendly version. Work with government to co-ordinate and manage the implementation of emission saving projects and to improve the effectiveness of spending on R&D of new technologies. Our goal is to create the framework through which government and business can collaborate together to build a low carbon economy. Audit and cut emissions from company car fleets and buildings. Our ambition is to do better than the government s own targets as set out in its Sustainable Procurement Action Plan. Provide resources over three years to strengthen the CBI s work on climate change in the UK and internationally, and oversee the deployment of this resource. This report is therefore a call to action. For companies on the Task Force, it marks the latest stage of a journey which builds on their existing commitments to tackle climate change. For the CBI, it marks the start of greater engagement on this agenda with all its members as well as the international business community and other stakeholders. Together with government and consumers, our goal is to work towards a greener and more prosperous planet. * This specific commitment excludes the London Stock Exchange in relation to the companies on its markets.

7

8 For further information or to receive this report in large text format, please contact the Business Environment Directorate at: CBI Centre Point 103 New Oxford Street London WC1A 1DU Designed and produced by Corporate Edge. Printed by Beacon Press using their environmental print technology. The printing inks are made using vegetable-based oils, no film or film processing chemicals were used. Beacon Press is a CarbonNeutral company and is registered to ISO14001 and EMAS. Printed on Take 2 Silk, which is made from 75% recycled fibre and is FSC accredited.

Workshop on Best Practices in Policies and Measures, 11 13 April 2000, Copenhagen THE UK CLIMATE CHANGE PROGRAMME AND EXAMPLES OF BEST PRACTICE Gabrielle Edwards United Kingdom Abstract: The UK published

Mainstreaming sustainable development The Government s vision and what this means in practice Department for Environment, Food and Rural Affairs February 2011 1 Mainstreaming Sustainable Development the

Building a Low-Carbon Economy The UK's Contribution to Tackling Climate Change www.theccc.org.uk Structure of the presentation 1. The 2050 target 2. The first three budgets 3. Wider social and economic

How local authorities can reduce emissions and manage climate risk Committee on Climate Change I May 2012 Summary Report Preface The Committee on Climate Change (the Committee) is an independent statutory

Invitation Energy Excellence how to achieve new, efficient energy consumption The Danish Energy Association invites you to join in the debate on a new energy efficiency policy Monday, 26 May 2008 Comwell

The UK cement industry aims to reduce greenhouse gases by 81% by 2050 The UK is the first country in the world to legally commit to greenhouse gas reduction targets as far ahead as 2050. The target set

Energy & Utility Skills The Sector Skills Council for the electricity, gas, waste management and water industries. Response to the Framework for the Development and Deployment of Renewables in Scotland

EU energy and climate policies beyond 2020 Policy recommendations EU s energy and climate change policies are in need of reform. They need to be consistent, simplified and set to drive European competitiveness.

WIND ENERGY Roadmap 1. Introduction to the Wind Energy Roadmap to 25 The development of renewable energy, including both offshore and onshore wind, is central to our energy policy. 2. Energy derived from

SUMMARY Consultation November 2012 Pathway 2050: An Energy Plan for Jersey 2 Pathway 2050: An Energy Plan for Jersey Department of the Environment Consultation Paper November 2012 Islanders are being asked

APPENDIX B - PL1 Homes that meet people s needs and aspirations Decent and accessible homes are vital to all. Our focus on providing affordable homes is being progressed primarily through the Affordable

EU Climate Policy: Towards a Copenhagen Protocol in 2009 Speech Check against delivery! Es gilt das gesprochene Wort! Ladies and Gentlemen, Our generation will be remembered as the first to be given solid

Towards an integrated Strategic Energy Technology (SET) Plan: Accelerating the European Energy System Transformation A EURELECTRIC Position Paper December 2015 EURELECTRIC is the voice of the electricity

Adapting to a changing climate and energy future Our policy position: Yarra Ranges Council acknowledges scientific advice concerning climate change and the need to mitigate and adapt to its impacts. Council

Speech by Ambassador Paul Johnston to IVA seminar on lessons from the UK energy market, 18th March 2015 Energy has come to the forefront of European policy debates, both as a Prosperity and Security issue.

KIRKLEES Visions and Strategies related to Energy and Climate Issues In recognition of the urgency of climate, the UK Government has committed to take action now and has introduced the Climate Change Act

How one simple step can halve a carbon footprint Overview How businesses disclose their greenhouse gas emissions has changed and in a big way. It follows on from new guidance issued by the World Resources

Extra help where it is needed: a new Energy Company Obligation May 2011 The content of this paper is subject to the consultation outcome Contents 1 Our objectives for the ECO 1.1 Householder support: Lower

Forests & Forest Products Forests & Forest Products Forests and the Climate Challenge Global temperatures are increasing and science has confirmed that we must limit the rise to under 2 C in order to avoid

targets and progress review final REPORT february 2014 7 SUmmary This is the final report of the Climate Change Authority on its Targets and Progress Review. The Climate Change Authority is required by

NATIONAL ECONOMIC DIALOGUE ECONOMIC GROWTH AND EQUITY IN TAX POLICY 16-17 JULY 2015 Economic Growth and Equity in Tax Policy This paper has been prepared as a contribution to the discussion in the breakout

Procurement Call for Energy Efficiency Research Invitation to Tender 17 September 2015 1. Background Ireland, like all countries in Europe, is required to meet a 20% savings target in relation to energy

April 2009 Briefing The 2020 climate change target In April 2009 the Secretary of State for Energy and Climate Change will decide the 2020 target for greenhouse gas emissions and the first three five year

1 action September 2014 Westpac Group has a long-standing commitment to operating sustainably. 3 Helping future generations For us, this is about helping future generations live better lives in a healthy

ACCELERATING GREEN ENERGY TOWARDS The Danish Energy Agreement of March 2012 The most ambitious energy plan of the world In March 2012 a historic new Energy Agreement was reached in Denmark. The Agreement

EU Heating and Cooling Strategy Consultation Forum Issue Papers EURELECTRIC comments September 2015 EURELECTRIC is the voice of the electricity industry in Europe. We speak for more than 3,500 companies

GLENEAGLES PLAN OF ACTION CLIMATE CHANGE, CLEAN ENERGY AND SUSTAINABLE DEVELOPMENT 1. We will take forward actions in the following key areas: Transforming the way we use energy Powering a cleaner future

Wales Procurement Policy Statement In December 2012 I launched the Wales Procurement Policy Statement (WPPS) setting out the principles by which I expect public sector procurement to be delivered in Wales.

www.defra.gov.uk www.esauk.org Responsibility Deal between Government and the waste and resource management sector June 2011 Department for Environment, Food and Rural Affairs Nobel House 17 Smith Square

NEW ZEALAND Submission to the ADP New Zealand s Intended Nationally Determined Contribution 7 July 2015 New Zealand hereby communicates its intended nationally determined contribution and the accompanying

and Science Energy White Paper at a glance WWW. i Energy White Paper at a glance The Australian Government made an election commitment to deliver an Energy White Paper to give industry and consumers certainty

June 28, 1999 ANALYSIS OF THE ADMINISTRATION S PROPOSED TAX INCENTIVES FOR ENERGY EFFICIENCY AND THE ENVIRONMENT INTRODUCTION A few months ago in the FY 2000 budget the President proposed a $3.6 billion

SUBMISSION BY THE UNITED ARAB EMIRATES 22 October 2015 Intended Nationally Determined Contribution of the United Arab Emirates In the post-2020 period the United Arab Emirates will continue to expand its

Business Opportunities for Scotland and the UK Dr Fiona Porter 19 October 2005 Contents A global market On Scotland s doorstep The range of opportunities Making them happen The Future Commercial Prospects

June 2015 Position Paper Contribution to the debate on electricity market design and capacity markets Eurogas is the association representing the European gas wholesale, retail and distribution sectors.

Energy Management How the FD can make a difference A FinancialDirector and publication Introduction In the current economic climate, controlling costs is a key priority for businesses of all sectors and

Renewable energy Impact report Prepared by Audit Scotland May 2015 Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. It provides services

Norwegian position on the proposed EU framework for climate and energy policies towards 2030 The EU plays an important role as a global leader in climate policy and has a fundamental interest in strengthening

Appendix A Lancashire County Council Procurement Strategy October 2014 Foreword Lancashire County Council spends approximately 529m per year through procurement. The goods, services and works we procure

The Future of Renewables Stuart Pocock Chief Operating Officer Who we are The REA was established in 2001 as a not-for-profit trade association, representing British renewable energy producers and promoting

Industrial Strategy: government and industry in partnership Driving success a strategy for growth and sustainability in the UK automotive sector Summary July 2013 SUMMARY DRIVING SUCCESS 1 The UK automotive

Renewable Energy Development and Environment in Thailand: Rangsan Sarochawikasit 1. Thailand national energy policy Dr Thaksin Shinawatra s government has formulated an energy policy to emphasize and promote

FIRST ANNOUNCEMENT AND CALL FOR ABSTRACTS 7th International Conference on Energy Efficiency in Domestic Appliances and Lighting (EEDAL 13) 11-13 September 2013 Coimbra, Portugal Introduction Citizens and

How smart technology is set to completely transform utilities An era of unprecedented change Utility companies operate in one of the most complex, high profile, regulated and politically charged sectors.

9 FINANCIAL SUPPORT PROGRAMS 108 9 FINANCIAL SUPPORT PROGRAMS 9 FINANCIAL SUPPORT PROGRAMS There are a number of Government support mechanisms to help reduce the barriers to undertaking action on energy

Enabling the Transition to a Green Economy: Government and business working together 2 Enabling the transition to a Green Economy Ministerial Foreword 1. The legacy of the last decade was an economy built

Conclusions Towards a green economy Conclusions Moving towards a green economy has the potential to achieve sustainable development and eradicate poverty on an unprecedented scale, with speed and effectiveness.

Empowering Sustainability in Logistics Building a Responsible Partnership for a Green Supply Chain Sustainability is now part of the supply chain lexicon or should be If mismanaged, supply chain decisions

VCE Industry and Enterprise 2012 2016 Written examination November Examination specifications Overall conditions The examination will be sat at a time and date to be set annually by the Victorian Curriculum

Advanced metering for SMEs Carbon and cost savings Executive Summary The Carbon Trust would like to thank everyone who has contributed to this report, either through direct involvement in the trial, general

Federal Department of the Environment, Transport, Energy and Communications DETEC Federal Office for the Environment FOEN From separation to cooperation: Emissions trading systems in the EU and Switzerland

MEETING THE ENERGY CHALLENGE A White Paper on Nuclear Power JANUARY 2008 For website addresses of the documents referred to in the footnotes, where applicable, please go to http://www.berr.gov.uk/energy/nuclear-whitepaper/footnotes/page43277.html

MEETING THE ENERGY CHALLENGE A White Paper on Nuclear Power JANUARY 2008 For website addresses of the documents referred to in the footnotes, where applicable, please go to http://www.berr.gov.uk/energy/nuclear-whitepaper/footnotes/page43277.html